WTO lumber ruling nears
The trade body is expected to release an interim decision on U.S. duties on Friday, Bruce Constantineau reports
Bruce Constantineau
Vancouver Sun
Tuesday, July 23, 2002
Canada is challenging the Americans on their method of calculating duties on softwood lumber.
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Canadian lumber producers want a second consecutive favour-able World Trade Organization ruling this week that would pressure U.S. officials to back away from their punishing duties on Canadian lumber exports to the U.S.
The WTO is scheduled to release an interim decision Friday on a Canadian challenge to the U.S. assertion that stumpage rates paid by Canadian producers provide an unfair benefit that warrants the imposition of duties.
Canada is also challenging the methodology the Americans have used in calculating the amount of duties needed to protect the U.S. industry. The duties average 27 per cent -- including about 18 per cent in countervailing duties and an anti-dumping rate of around nine per cent.
"Everything helps and we would look upon another favourable ruling as help in small steps," said Slocan Forest Products Ltd. president Jim Shepherd. "Ultimately the Americans and Canadians have to sit down and come up with some common ground here.
"This can only be helpful in terms of clearing the air."
The WTO ruled last week that the U.S. government should stop its practice of collecting tariffs on certain imports and passing them on to U.S. companies. The interim ruling said the controversial Byrd amendment violates international trade laws by unfairly using countervailing and anti-dumping duties to subsidize U.S. competitors.
It has been estimated that by 2004, more than $1 billion US worth of duties from Canadian lumber exporters could be transferred directly to U.S. competitors.
A final WTO decision on the Byrd amendment is expected next month. The U.S. is expected to appeal the final ruling, which would take the case through to early 2003.
Vancouver forest industry consultant Charles Widman said favourable WTO rulings will represent symbolic victories more than anything else.
"The WTO is not a part of U.S. trade law and [the Americans] don't necessarily have to abide by its decisions," he said. "The main thing we can hope to get out of this is to build the pressure to compel them to get back to the table and negotiate something better than we have now."
Widman said challenges to the duties made through the North American Free Trade Agreement will be more effective because NAFTA is a part of U.S. trade law.
Slocan Forest Products, meanwhile, reported Monday that extraordinary items in the second quarter this year helped profits nearly double.
The company reported net earnings of $43.4 million during the quarter ended June 30, compared with earnings of $25.1 million during the same period last year.
Profits were boosted by a reversal of $21.8 million in duties the company overpaid in 2001 and the first quarter of 2002. Changes in accounting rules also created a currency gain of $17.2 million.
Shepherd said the impact of the softwood lumber dispute with the U.S. will be greater in the coming months as cash deposits for all shipments to the U.S. now are required.
"The company's results have been adversely affected by the imposition of the duties, and initiatives have been undertaken to mitigate the effects, including the emphasis on lumber markets outside of the United States," he said.
Slocan reported total sales of $229.9 million in the second quarter this year, compared with $251.2 million in sales during the same period last year.
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Strke 2? Well maybe 1 1/2. Don't care, I'm off boating for the next ten days, Maybe the world financial collapse will help me forget about something so trivial as a mere inter-nation trade dispute. |
